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Bush Rhetoric on Gas Crisis Becomes Positively... Environmental

If Cars Can Run on BS, then Energy Crisis Solved

Some Bush Proposals Helpful, but Both Sides Miss the Point; Here's a Detailed Analysis

President George Bush acknowledged in his State of the Union that America was "addicted to oil". His response to the recent run up in gasoline prices included similar environmental language.

But addicts are given one remedy: go cold turkey! No coherent program to wean us from oil can be heard from President Bush. Rather, he sidesteps the key issues: how do we get energy to reflect its real cost (incorporating environmental and national security costs as well as economic risks). This would mean higher gasoline costs, which then need to be balanced by some form of consumer rebate. All while prventing the oil companies from unfairly profiting.

At the same time, there needs to be a recognition that there is no long term, supply side solution to the gasoline crisis. Given that experts conclude that oil reserves have peaked, sometime in the next 50 years and quite possibly, much sooner, the amount of oil is going to be inadequate and the price is going to skyrocket. If America has done no more than it is discussing today, we will be very vulnerable when this time comes.

A demand side strategy is necessary. (See Lead Story) It's really only a matter of time before rising prices diminish demand. The only real question is how difficult that transition will be.
In all fairness, Bush has incorporated a few good policy propsoals into his plan. But, these proposals are not exactly "timely"--especially in regards to a problem that is long term and obvious. On April 30th, 2001, Vice President Cheney famously said, "Conservation may be a sign of personal virtue but it is not a sufficient basis for a sound, comprehensive energy policy." He is referring to the Administration energy polciy that was decided behind closed doors, presumably with the same energy companies the Bush Administration is saying they will be keeping a watchful eye on now.
Here are the useful Bush proposals:

• Asking Congress to eliminate some of the billions in tax breaks that the US government has given to oil companies in recent years
• Expanding the tax-breaks for hybrid vehicles.
• Supporting conservation, car-pooling and car repairs to keep automobiles running at peak efficiency.

Some of the other Bush proposals are harmless if extremely marginal. Enabling oil companies to delay repaying the Strategic Petroleum Reserve frees up a total of 12 million gallons of gasoline, when Americans consume 20 million gallons each day.

And then there is the most ironic part of the President’s plan: his touting of Ethanol as an alternative in one breath, while doing away with environmental rules that require Ethanol to be added to gasoline in the other. The addition of Ethanol to gasoline makes it possible for blends of gasoline to meet clean air standards. In fact, a short-term waiver may be tolerable, as long as it is extremely limited. But health and environmental groups should reject any effort to make long-term weakening changes to gasoline standards.

Meanwhile, the President’s financial supporters and the oil industry have their own culprit for the run up in gas prices: environmentalists. The real truth is that oil companies could have anticipated this problem and planned for it. Instead, they are taking advantage of a situation they helped create.

The fact is that the President has very little ability to drive down the price of gasoline per gallon, because increasingly the demand for oil globally is outstripping the supply. Unless we get serious about letting oil’s price reflect its real cost to our nation which would then lead to an appropriate consumer response, prices and energy windfall profits will just continue to increase.

Frank O Donnell of Clean Air Watch points out the following disconnects in the "Blame the Environmentalists" argument:

Myth #1: Clean air standards must be relaxed.

Bush:

Under federal air quality laws, some areas of the country are required to use fuel blend called reformulated gasoline. Now, as you well know, this year we're undergoing a rapid transition in the primary ingredient in reformulated gas from MTBE to ethanol…

Yet state and local officials in some parts of our country worry about supply disruption for the short term. They worry about the sudden change from MTBE to ethanol, and that the ethanol producers won't be able to meet the demand. And that's causing the price of gasoline to go up some amount in their jurisdictions.

And some have contacted us to determine whether or not they can ask the EPA to waive local fuel requirements on a temporary basis … So I'm directing EPA Administrator Johnson to use all his available authority to grant waivers that would relieve critical fuel supply shortages. And I do that for the sake of our consumers.

Reality:

In last year’s energy bill, Congress actually eliminated the requirement that cleaner reformulated gasoline contain MTBE or ethanol. MTBE makers including ExxonMobil decided to stop shipping its product after Congress refused to give them a deal absolving these big water polluters from product liability lawsuits. But the companies have known about that congressional decision for nearly a year. They could have arranged a smoother transition to new gasoline blends. But scarcity drives up prices and oil profits.

Myth #2: Environmental requirements have blocked oil companies from building new refineries.

Bush:
There has not been a new refinery built in America in 30 years.

Reality:
In declaring that part of the problem is that we haven’t built new refineries in the U.S. in decades, the president is being simply disingenuous. As he well knows from his days in the business, the big oil companies decided for economic reasons that it was more cost-effective to expand existing refineries than build new ones. In fact, they have managed those expansions to avoid a gasoline glut that could lead to lower prices.

Myth #3: Some mythical entity has created “boutique fuels” around the nation.

Bush:
The number of boutique fuels has expanded rapidly over the years, and America now has an uncoordinated and overly complex set of fuel rules … I want to simplify the process for the sake of our consumers.

Reality:
Some states have adopted specialized fuels usually at the request of the oil industry, which has frequently argued in favor of such fuels instead of cleaner gasoline. The oil industry has frequently profited by this seeming confusion.
In last year’s energy bill, Congress limited the number of future blends. But the oil industry has not offered to return any of the associated profits to consumers.